Yusha Zhang & Shenzhen Huanyee Intellectual Property Co Sanctioned

On December 10, 2021, the United States Patent and Trademark Office (USPTO) issued a final sanction order against Yusha Zhang and Shenzhen Huanyee Intellectual Property Co., Ltd. This follows a show cause order issued on June 8, 2021 and a response filed on July 6, 2021. The respondents have been involved in filing factums in more than 15,000 trademark cases before the USPTO. The respondents engaged in an unauthorized practice of law, provided false information about the applicants’ domicile, inadmissibly entered the signature of the named signer on statements and verifications, and violated other rules of the law. ‘USPTO and the USPTO Website Terms of Use. The penalties include the termination of more than 15,000 proceedings involving submissions filed by the Respondents and the prohibition on the Respondents from further correspondence or submissions.

By the Order,

Huanyee is a China-based organization that announces that it helps clients register trademarks in China, has filed more than 30,000 foreign trademark applications, including in the United States, and provides trademark registration services to United States through its website.

Respondents are not permitted to make representations to the USPTO on behalf of others in trademark matters. Ms. Zhang is not a licensed attorney in the United States, and Huanyee does not have any licensed attorneys in the United States on staff who oversee the work of the respondents.

The name “Yusha Zhang” and / or email addresses associated with the Respondents have appeared in the correspondence fields of more than 1,700 trademark applications and registrations naming various allegedly unrepresented applicants submitted through the Electronic Trademark Application System. USPTO commerce (“TEAS”), allegedly filed by the applicants between 2016 and 2019. Submissions primarily identified Huanyee’s mailing address and an email address within the huanyee.com domain. In addition, the Respondents registered several uspto.gov accounts and continued to file over 14,000 additional claims and other submissions on behalf of third parties over the past three years.

Although not licensed to practice before the USPTO in trademark matters, the Respondents have engaged in such practice by advising and advising clients on the prospect of filing trademark applications and other documents with of the USPTO, preparing and prosecuting trademark applications in the United States, preparing and submitting trademark arguments and amendments to the USPTO, and communicating directly with the USPTO at name of third party.

The record establishes that the Respondents engaged in an unauthorized practice before the Bureau. The response acknowledges that the Respondents did so. See response to 6 (indicating that respondents “expect[] to go beyond that and to comply with its conduct with required USPTO regulations “by endeavoring, inter alia, to” work with the United States Trademark Board “) and response to 8 (noting that the respondents “are already excluded and state that they will no longer make deposits”).

In response to the Show Cause Order,

The Response disagrees “with many of the statements of the Order of Justification” (Response to 5) but provides no evidence to refute them. The response ultimately concedes that the respondents violated USPTO rules and website terms of use, but seeks to excuse the violations and avoid penalties by challenging the administrative penalty process and the authority to impose Sanctions. The response also argues that penalties should not be imposed because the respondents did not know the requirements of the USPTO rules, did not willfully violate them, and are taking action to correct the issues raised.

As stated in the Final Order, the USPTO found the arguments unconvincing and failed to establish why any of the penalties described in the Show Cause Order should not be imposed.

As a result, the USPTO has imposed penalties, including the termination of all trademark application proceedings involving submissions by the defendants or filed through a uspto.gov account registered or controlled by Ms. Zhang or any officer, employee or agent. by Huanyee. The USPTO provided a 198-page, 2-column list of trademarks covered by the ordinance listing more than 15,000 trademark applications.

Explaining the penalties, the USPTO said,

the conduct at issue was intentional and was part of a pattern of activities designed to circumvent USPTO rules. The conduct infected thousands of applications, resulted in bogus and fraudulent submissions to the USPTO, and undermined the integrity of the federal trademark registration process …

The blatant nature of the conduct in question justifies the termination of the proceedings. A penalty less than termination of the proceeding would not remedy the conduct or deter respondents or third parties from engaging in similar conduct. A ploy involving an intentional circumvention of USPTO rules and USPTO fraud is the epitome of serious misconduct warranting termination.

Huanyee was presumably trying to avoid the costs of hiring a US lawyer, possibly to take advantage of government incentives for trademark registrations, as previously reported by the USPTO. In fact, in April 2021, Huanyee explained in a social media account posting Shenzhen’s policy on brand subsidies of up to RMB 3,000 (~ $ 464) per brand. It is not clear whether applicants will have to repay the grants now that the trademark process is complete.

It is not yet known whether the National Intellectual Property Administration of China (CNIPA) will impose its own sanctions on Huanyee for unauthorized practice of the law.

The full text of the final order is available here.

© 2021 Schwegman, Lundberg & Woessner, PA All rights reserved.Revue nationale de droit, volume XI, number 344

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